When Cincinnati trial lawyer Joseph Shea founded his online
legal research service, he knew he was "walking in a land of giants." After
all, LexisNexis and Thomson West, the two legal publishing powerhouses, were
as ubiquitous as Coke and Pepsi, and just as dominant.

It didnít deter Shea, though. The civil litigator felt compelled
to act. Too many times he had found himself at a conference table across
from a well-heeled opponent carrying a briefcase crowded with research courtesy
of the publishing conglomerates.

Shea decided he wanted to level the playing field for small
law firms, giving sole practitioners and two- or three-person shops access
to the same types of online legal research used by the large law firms, but
at a substantially discounted rate.

To do it, Shea partnered with the Ohio State Bar Association,
which committed to financing the Web-based service and created what would
become the Casemaker Consortium, an online legal research library that is
marketed through state bar associations.

"We try to focus on what most of the lawyers need most
of the time. Weíre not going to have every single thing," says Shea. "We
wonít have all the bells and whistles the other guys have, but weíll certainly
have a horn. Weíve got brakes and an engine, too. You can drive this car,
and itíll do well by you."

For some, Casemakerís business model shows both vision and
audacity, especially since Thomson West and LexisNexis have had a lock on
the industry for so long, thanks to their financial heft and the quality
of their products and services.

Still, since going live with its online system in Ohio in 1999
and nationally in 2000, Casemaker has seen 19 states join the consortium.
Although the company declines to say how many lawyers access the service
or at what frequency, the experiment that began in Ohio has successfully
spread from the Midwest to New England to the West Coast.

"Every single time somebody else signs on to the consortium,
itís like a snowball rolling downhill," says Denny Ramey, executive
director of the Ohio State Bar Association. "People, when they get in
it, turn into zealots. They canít believe itís this affordable and useful,
so they tell their friends who tell their friends at other bars and try to
get them to join. It wonít be very long before, if youíre not in it, youíre
in the minority."

Whether it was by accident or a conscious choice that the large
information services companies didnít immediately focus on sole practitioners
and small law firms as a viable online market, the inaction created a vacuum,
and Casemaker and its low-cost or no-cost online peers ó FindLaw, Loislaw
and VersusLaw ó filled it at the time.

Their head start would be short-lived, however. Reeling from
a sluggish economy in 2001 and 2002 and having saturated the online market
at large law firms, the major research corporations soon turned their attention
to the smaller firms. By aggressively redesigning and repackaging their services,
they are now reaching out to the more than 500,000 attorneys in small firms
nationwide and hoping to collect a substantial piece of the estimated $3
billion in annual sales from the small firm market.

"I do think these smaller companies have a role to play," says
David Jastrow, an analyst with Simba Information, a Connecticut-based market
forecasting company that studies the publishing industry. "There are
certain niche areas of the law that wouldnít be on the radar screen of a
colossal player of the size of Westlaw or LexisNexis, but ultimately there
are a finite number of opportunities that can be seized. It really is a war
of money and will."

Today Casemaker and the smaller online research companies ó the
ones that havenít been purchased by LexisNexis, Thomson West or Wolters Kluwer,
the third international player in the business ó find themselves in a pitched
battle with the mighty giants, and the future of online legal research in
the United States remains as ever-changing and unpredictable as the technology
that drives it.

The Conversion ProcessMoney and will can be found in abundance in the legal publishing
and information services businesses, but especially money. The industry
is so big it attracted international investors that sparked a wave
of acquisitions and consolidations in the 1990s. Today the lionís share
of the market is owned by three companies ó two of them headquartered
in The Netherlands and one in Canada.

More than one-third of the $15.53 billion in the U.S. professional
publishing and information market ó about $5.57 billion ó comes from the
legal publishing and information services market, according to Simba. The
science and technology market ranks second with 32.3 percent of sales. The
remaining third is split evenly between medical and business publication
sales.

Worldwide the top legal publishers remain the Thomson Corporation
(Westlaw) at $3.14 billion in sales in 2003, Reed Elsevier (LexisNexis) at
$2.43 billion and Wolters Kluwer (CCH/Loislaw) at $1.41 billion, Simbaís
research shows.

The Bureau of National Affairs, an employee-owned company headquartered
in Washington, D.C., ranked a distant fourth with $242.5 million in sales
in 2003. Small companies such as VersusLaw and Casemaker declined to report
their sales, saying it would give away too much information to their giant
competitors.

For the major corporations, books remain their biggest moneymaker,
accounting for $2.39 billion of sales, or 42.9 percent, in 2003. They are
the go-to research tool for attorneys, librarians and paralegals in the United
States, despite the rush to go electronic.

The annual technology survey by the ABAís Legal Technology
Resource Center (LTRC) shows that 75 percent of lawyers use print sources
on a regular basis for legal research. Compare that to the 45 percent who
say they use free Internet services on a regular basis or the 53 percent
who use paid Web services.

"From almost the inception of my career in legal publishing,
thereís been a discussion or school of thought that the printed wordís days
are numbered," says Forrest Rhoads, a Thomson West vice president who
oversees new product development. "Quite frankly, it hasnít happened
yet. I think print will continue to play a fairly significant role in legal
research. It isnít going to be growing as much as the online services, but
it will still be there for those attorneys who are more comfortable with
books."

Print resources arenít a crutch for the technologically challenged ó those
who canít tell a computer monitor from a television screen. They are fixtures
in law school and law firm libraries because they are often the easiest and
quickest way to find a particular citation or statute.

Catherine Sanders Reach, LTRCís associate director, says while
Thomson West, LexisNexis and smaller companies are making most of their primary
sources available through the Internet, the conversion for secondary sources,
such as treatises and periodicals, is moving more slowly.

"Secondary sources seem to be more accepted in print than
the electronic format," she says. "Itís difficult to move something
as complex as these resources into an online format, especially the big sets
that cover areas of law such as securities."

But that doesnít mean the online market isnít keeping pace
with book publishing or even exceeding it in some cases. Sixty-two percent
of legal publishers say they are in the process of converting their libraries
from print to digital, according to LTRCís survey. In the next three years,
legal publishers estimate about 43 percent of their print-only titles will
be available online.

"The big thing is legal publishers have the opportunity
for duality today, whereas you didnít have the electronic option in the past.
A lot of firms are ditching their reportersí sets all together. The primary
legal research materials are more and more accessed via the Internet," says
Reach. "As attorneys hit a comfort level with electronic sources and
the availability is there, I think weíll see even more conversion."

The conversion process is already pumping up sales. Simba Information
reported that online legal research sales continued their steady growth,
inching up 6.4 percent between 2002 and 2003 to $1.52 billion, or 27.3 percent,
of the legal information services market.

The U.S. legal information market is projected to grow by 10
percent between 2004 and 2007 to $6.32 billion ó much of that growth coming
in online publishing, according to Simba.

Sliced and DicedLegal researchís past and present may be defined by the printed word,
but its future will be defined by bits and bytes. There is no way to
ignore the pervasiveness and power of the Internet as a searching and
processing tool. Technology has made it possible to slice and dice the
law in ways not envisioned 30 years ago, or even as recently as 10 years
ago. Every single day software engineers are coming up with better ways
to search, assemble and dissect case law, statutes and administrative
rules.

It seems the only constant in the online research business
is change. Barely a week goes by without an announcement of a new product
to speed the delivery of research materials. Dozens of Internet newsletters
are dedicated to keeping tabs on the changes and making sure clients are
well versed on how to implement them.

Ironically, it is the complexity of technology that is driving
some of this whirlwind pace. Industry bigwigs are pressuring the software
and database inventors to mastermind products that can be, like the bicycle,
ridden once and learned for life.

"The large firms have professional law librarians and
representatives from vendors to do trainings as often as once a week," says
Reach. "Attorneys at large firms can get training at their desks. Thereís
a reason why you get all that training. The systems are not all that easy.

"For the sole practitioners and small firms, they donít
have the time or inclination to learn how to use the systems. If they canít
figure it out in five minutes, theyíre going to go up to the local law library
and do their research. Can you blame them? Itís pretty hard to figure out
what Boolean searches are when you donít do them on a daily basis."

Online researching needs to be simple and complex at the same
time, like a computer interface that ensures users see an easy-to-comprehend
screen with straightforward and logical buttons. Meanwhile, behind the screen
is a complex database that knows what you are searching for even if you donít.

The large companies quickly seized upon the simplicity movement
and the opportunity it provides for new profits. Along with designing easy-to-use
systems, they are tailoring their services to the needs of niche firms that
have special practice areas such as immigration, securities and bankruptcy
law.

"The investments weíre making right now in transforming
Thomson West from a single big system into a system that attends to specific
practice areas have been under way for the last two or three years," says
Rhoads. "We want to take on the coloration that is exactly what a practitioner
in specific areas needs."

As large corporations moved to take advantage of these opportunities
in recent years, smaller companies realized that technological advances were
the break they needed to get into a market. In the past, it took a moneyed
player with a massive infrastructure to print and distribute massive quantities
of books. With the Internet, a smart software engineer and a relatively small
investment could get you noticed.

Joe Acton, founder of VersusLaw, a Redmond, Washington-based
online service, saw the opportunities as well. An attorney, and former professional
hockey player and newspaper publisher, Acton was producing newsletters focusing
on professional responsibility and legal malpractice when the World Wide
Web took its fledgling steps.

"Joe is an innovator," says Jim Corbett, vice president
of business development at VersusLaw. "He recognized early on that the
electronic medium was a way to go. Pre-Internet, he took the hard copy of
his monthly newsletter and put it on a bulletin board service. He saw that
when you have a printed newsletter, you can only put in a reference to a
case. When you offer it electronically, you can put the whole case online.
Thatís what the beginning of online publishing was like, people like Joe
realizing this could be something big."

The "bigness" came in the obvious convenience. The
Internet made it possible to live in Florida and call up statutes in Texas
or court opinions in Montana or administrative rules in Michigan. Up to that
point, the large research companies had spent millions in staff time and
fees to retrieve paper copies of documents and to create original work, such
as citatory services. It was a world the small-fry services couldnít dream
of competing in.

With the changes in technology in the mid- to late 1990s, and
the growing prominence of the Web as an information resource, government
agencies, state legislatures and congressional offices began using the Internet
to post legal, administrative and technical documents, basically throwing
open their file cabinets to the general public. Once all that information
was available, the challenge became compiling and ordering the documents
in a logical and easily accessible format for those lawyers and researchers
who didnít have the time to peruse every government site.

"The Internet guaranteed that you could find things out
about government and the courts, and you didnít have to be a lawyer with
a very expensive book in your library to do it," says Thomas Mighell,
a Texas attorney who produces an online national newsletter about legal research
and publishing. "It was and continues to be the great equalizer."

High Rollers and Hip TchotchkesThomson West and LexisNexis arenít the highest rollers in the room
simply because they know how to put their logos on baseball caps and
key chains. Even their competitors will admit that they produce consistently
high-quality services that meet the needs and go beyond the expectations
of their clients. Research experts say the two companies have mastered
the art of customer service as well, using a network of local staffers
to cater to the needs of lawyers, law schools and law librarians.

"For in-depth legal research, free Internet sources are
not going to be the most efficient way to answer your questions,íí says Cindy
Carlson, electronic resource librarian at Fried Frank Harris Shriver & Jacobson
LLP in Washington, D.C. "Lexis and Westlaw are both improving access
to statutes and regulations. Theyíre doing their best to cross-reference.
Theyíre constantly making improvements."

But all that customer service couldnít hide the fact that the
large law firm market had just about reached its saturation point. The top
100 and 500 firms in the nation had committed themselves to one or the other,
or both. Law libraries and law schools had made their deals. The low-hanging
fruit had been plucked.

Online legal research wasnít the next new thing anymore. It
was what every good lawyer, especially those in the big firms, was doing,
and no amount of online gadgets or gizmos was going to reveal an untapped
pool of users at the large law firms.

And the new users who were entering the system ó new associates ó were
already the focus of a massive marketing effort by LexisNexis and Thomson
West that began in law school. The legal research giants spend millions every
year providing free access to their services, countless hours of training
and unlimited printing to law school students. Add a hip tchotchke or two,
and it might be possible to engender brand loyalty for life.

"It wouldnít be inaccurate to say theyíre very much like
drug dealers," says Tanya Thomas, a lawyer and law librarian at Spiegel & McDiarmid. "They
get you hooked so you donít know how to do the research any other way."

What the major research corporations had going for them as
the legal publishing market turned lethargic was the knowledge that they
had a chance to use their well-respected brand names and the intense loyalty
of their customers to their advantage, and so they did as they went searching
for new territory.

One of the first places they looked was in their own backyard.
After all, they have entrťe into thousands of legal offices all over
the United States ó offices that have many unmet technological needs. With
their trusted names, and their research and development staffs working overtime
exploring the potential of client development and attorney workflow software,
it didnít take long for them to come up with the next big thing: a software
package to streamline the production of documents, the processing of information
and the smooth running of law offices. This so-called practice management
or knowledge management software allows attorneys to search external and
internal data sources and to manage reams of electronic documents.

"Our full realization was that no matter how many databases
we build in (Thomson Westís headquarters in) Eagan, Minn., a significant
aspect of the intellectual knowledge of the law is not within our building," says
Rhoads. "Itís in the law firms and corporations. Our products need to
provide law firms with tools to make all of that information accessible and
comprehensible."

Acquisitions and mergers in the United States and overseas
have opened up new opportunities for the major players as well. Thomson acquired
Glasser LegalWorks, which hosts legal education seminars, whereas Wolters
Kluwer purchased the German online legal publication Verlag Praktisches.

The major research corporations also realized that there was
one untapped law firm market that they needed to look at more closely, a
market that had seemed particularly difficult to crack at first because the
lawyers there would have less use for their product and even less money to
pay for it. The market? Sole practitioners and small firms.

Small for LessIt didnít take long for the large publishing companies to find out
what their smaller rivals had known all along about sole practitioners
and small law firms: whatever online research service you sell them needs
to be inexpensive and easy to use. Within a short time, they were looking
at creating their own low-maintenance online research sites, or buying
somebody elseís.

LexisNexis chose to develop its own site. The creation of LexisONE,
a down-sized copy of the top-of-the-line model, offers free state and federal
case law and U.S. Supreme Court cases. It also offers customers a discounted
fee to view the Shepardís treatment on cases along with free access to Martindale-Hubbellís
Directory of Experts & Services.

"In the small law market, (lawyers) are still not up to
the curve on technology adoption," says Ann Fullenkamp, who oversees
LexisNexisís small business operations. "The government sites and free
sites . . . really condition the market for Web-based research. My hypothesis
is people are getting used to the technology and are more willing to explore
and utilize the materials we have online."

Thomson West, the granddaddy in the publishing industry at
more than 100 years old, did both. It created its own specially tailored
site for small law firms, WestlawPRO, and purchased FindLaw, a well-respected
free site that had become a favorite among in-the-know researchers. WestlawPRO
offers customized resources at fixed fees for small shops.

Known for its wide range of state and federal resources, and
ease of use, FindLaw was the top Web portal for free information. Under Thomson
West, FindLaw has kept its own name, and maintained much of its unique online
personality.

Wolters Kluwer followed Thomson Westís example and purchased
Loislaw, a subscription legal research library containing comprehensive law
libraries for all 50 states and the federal jurisdictions, to complement
its CCH services. Loislaw was well respected by legal researchers. It wasnít
fancy, but it had a comprehensive library for state and federal jurisdictions
along with an easy-to-use search engine, so it didnít require a masterís
degree in computer science to do a search.

For the folks at VersusLaw, the sales of FindLaw and Loislaw
and the entrance of LexisONE and WestlawPRO into the market were signs that
they had been right in targeting the small law firms. They realized the time
for congratulations was short though, as soon the large corporations would
be fishing in their end of the pond.

VersusLaw reevaluated its position, beefing up services and
reassessing pricing policies. The goal was to provide a solid, reliable product
and then make it so cheap the customer couldnít say no. The lowest level
monthly subscription is $11.95, and the highest is $34.95.

"We decided that if we were serious about serving this
underserved end of the marketplace, the small firms and single practitioners
who canít afford Lexis or Thomson West, then we would have to reevaluate
our pricing program," says Corbett. "We considered being free,
but instead we decided to be almost free, so if they get it and donít use
it, they wonít mind too much. The important thing for us all along is to
keep our service cheaper than the biggies."

Price MattersMake no mistake about it: price matters in the legal research wars.
It isnít always the determining factor for small and large law firms
as they select their online research service, but it is part of the conversation,
and occasionally it can tip the scales from one side to the other. Law
firms werenít immune to the listless economy of the last four years,
and neither were their clients. Passing on the costs of pricey online
legal research became more difficult recently, and swallowing the costs
whole at the law firm seemed even worse.

The American Lawyer survey of librarians at the nationís
largest law firms, released last June, shows that, on average, firms spent
$1.6 million, or $2,971 per lawyer, on printed and electronic resources in
2003. That is up from $1.3 million in 2002. In 2003, firms using Westlaw
said they spent, on average, $1.2 million, or $2,971 per lawyer, for research,
whereas LexisNexis users spent $747,248, or $1,721 per lawyer.

Even the most passionate partisans in the legal research wars
believe that the high fees for Westlaw and LexisNexis arenít sustainable
in the long term.

"The biggies who really paved the way for all of us, weíre
all in their debt," says Patrick Nester, chief of staff of the State
Bar of Texas, which recently signed with Casemaker to provide online research
services to its members at about $15 per attorney per year. "But they
need to be looking at how the competition can do it so cheaply compared to
them. If I were in their shoes, Iíd be trying to get my prices down or compete
in some other way."

The large research services say theyíre doing their best to
trim costs. Theyíre offering a top-notch service while attacking their pricing
issues with special daily, weekly and monthly rates or by offering per-document
fees.

"What (small law firms) would really like are cheap alternatives," says
Fullenkamp. "They have a lot of cost pressures in their businesses because
they donít bill things back to their clients. . . . They donít like to be
surprised in their bills. We work really hard to make that a rare occurrence."

The rare occurrence may be one occurrence too many, says Shea.
He points out that it is difficult for the large firms to compete with Casemakerís
shockingly low prices, which are as low as $8 per attorney per year in some
states.

"The price is set by the bar association and is dependent
on what they want to include in the database," says Shea. "It can
be as little or as much as you would like. The bar associations even choose
to eat the cost sometimes just to provide a new service to their members."

Critics of Casemaker and the other lower priced services say
there is a reason why their subscription rates are so low ó the quality of
the service. The smaller online libraries arenít nearly as complete, and
the search functions are clunky. For example, they note that researchers
cannot hunt across jurisdictions in Casemaker. Instead you must do a search
in each of the serviceís 20 states, which are part of the library.

"When you look at Casemaker, many of the materials you
can find there are free on the Internet," says Fullenkamp. "There
are no annotated statutes, no headnotes on their case law. . . . You canít
Shepardize on Casemaker. It just isnít complete."

To Each Its OwnComplete or not, what the small online services have brought to the
battle is a nimbleness that speeds their movements and allows for inventive
thinking. Decisions can turn on a dime and with the approval of just
a handful of parties because there is no bureaucracy to maneuver or time
zones to cross.

Take Casemakerís decision to market its service through the
state bars. The large companies had been cutting deals with the bars for
years, offering discounts for members and reduced rates for the bars themselves.
But no one until Casemaker showed up on the scene ever offered the bar associations
the opportunity to make key decisions and have ownership of the product.

Casemaker allowed individual state bars not only to set the
price and select the libraryís contents from a cafeteria-style menu of choices
(i.e. state court decisions, administrative rules, federal court rules),
but also to operate the research engine off their own websites. And the more
states that joined the consortium, the deeper and wider the library that
was available to every state.

"You can put as little or as much as you want into the
state database," says Rod Wegener, chief financial officer for the Oregon
State Bar. "The more you put in, the more itís going to be. When you
boil it down, even if it doesnít have everything that Westlaw has, at $15
itís almost free to members, and itís worth it."

Clauses are written into the contracts to ensure that both
sides are protected. If the Ohio State Bar Association or Lawriter, LLC,
Sheaís company, ever decides to sell the consortium, the state bars get a
cut of the profits and they get to keep their stateís electronic library.

Along with Oregon and Ohio, the Casemaker Consortium includes
Alabama, Colorado, Connecticut, Georgia, Idaho, Indiana, Maine, Massachusetts,
Mississippi, Nebraska, New Hampshire, North Carolina, Rhode Island, South
Carolina, Texas, Utah, Vermont, Washington and West Virginia. Michiganís
information is included in the consortium, but the state bar does not belong.

"We went from not knowing whether anybody would want to
do it with us to now having 20 states (21 as of this writing) and five other
states in various stages of consideration," says Ramey.

If Casemakerís global rivals are sweating the competition,
it isnít apparent.

"I donít know that threat is the right word," says
Fullenkamp. "Itís probably making me a better business partner for the
small law firms. I work harder at being the kind of partner they want to
do business with. We seldom lose in a head-to-head when weíre up against
Casemaker."

The Golden GooseAsk a law librarian about the status of legal research in America,
and he or she will talk about the value of books, shrinking shelf space,
the struggle to keep spending in check and the growing prominence of
the World Wide Web. They, more than most, recognize that this is a time
of transition in legal research.

The Webís potential as both a research tool and a 21st-century
golden goose have drawn dozens of companies into the fray. The Web is at
once frontier town and computer science laboratory, an intoxicating blend
of risk and reward for the companies looking to capitalize on its benefits.
It is also the engine that will most likely drive the expansion of both sales
and profits for legal publishing and information services companies, large
and small.

But the benefits donít accrue to just the small and large research
companies battling it out for profits. After all, sole practitioners and
small law firms have more choices today than yesterday, as do large law firms;
and every improvement in the service, quality and affordability of online
research can be a benefit for law firms as well as their clients.

The most valuable byproduct of these legal research wars, say
observers, is that access to so much legal knowledge has the potential to
improve the quality of every attorneyís work, from the sole practitioner
in a one-room office to a partner at the nationís largest law firm.

"With online tools being so readily available and easy
to use, lawyers can have everything at their fingertips today," says
Chris Reed, a lawyer and assistant director for information services at the
Jacob Burns Law Library at the George Washington University Law School. "The
same goes for the court. A judge or justice has clerks who have access to
all the same databases, and they can make more informed decisions with that
knowledge. I donít know what the rules of engagement will be in the long
term, but I certainly think itís possible for all this knowledge to improve
the quality of our legal system, and weíre all served by that."

ABOUT THE AUTHORSarah Kellogg is a regional reporter for the Newhouse News
Service. Her article originally appeared in the February 2005 issue of the
Washington Lawyer and is reprinted here with permission the D.C. Bar.